Stephanie Link, chief investment strategist and portfolio manager at Hightower Advisors, tries to buy low and sell high and Caterpillar Inc (NYSE: CAT) presents an opportunity to buy low, she said Tuesday on CNBC’s “Fast Money Halftime Report.”
What To Know: Caterpillar is down more than 25% from its highs and Link thinks “demand is going to be off the charts.”
The stock is a restructuring and rising free cash flow story so margins should hold and the company is going to generate free cash flow of $1 billion this year, Link said.
Caterpillar is buying back $2 billion worth of stock, she noted. The stock is trading at a discount to the market at 19 times earnings and offers a more than 2% dividend yield.
Related Link: Price To Earnings Ratio Insights For Caterpillar
Why It’s Important: Caterpillar’s strong fundamentals show that pullbacks should be viewed as buying opportunities, she said.
“That is a good story to me,” Link said. “That means when the stock breaks, that’s a buying opportunity.”
Link bought more Caterpillar stock as the broader markets sold off yesterday.
CAT Price Action: Caterpillar has traded as high as $246.69 and as low as $142.73 over a 52-week period.
The stock is up 0.18% at $191.16 at time of publication.
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